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UK – Employers to undergo equal pay audits for lost sex discrimination cases

18 June 2012

The Government has confirmed its intentions to press ahead with plans to require employers to conduct pay audits if they lose an equal pay or a sex discrimination case related to pay at an employment tribunal.

The equalities minister, Lynne Featherstone, announced plans in a statement to Parliament last week which will have employers compare the pay of women and men doing the same work, and investigate any potential discrepancies in compensation.

Although the Government will make exact details public later this year, Ms Featherstone has confirmed that micro-businesses, as well as organisations which have already conducted an audit in the previous three years, will initially be exempt from this.

The statement also says that employers who can prove transparent pay practices will not be required to undergo an audit.

Shirley Wright, a partner at international law firm Eversheds, said that the impact of any change in the law will be limited. “Nevertheless, many organisations will be concerned at the move, which seems to be swimming against the deregulatory tide of other government policies.

“Employers will feel under increased pressure to settle equal pay claims that they might otherwise have defended, to avoid the risk of having to carry out a time consuming analysis of pay and jobs across their organisation.

“That said, the Government’s plan to push ahead with this proposal is not altogether surprising: in 2010 the coalition partners both gave election manifesto commitments to introduce compulsory pay audits in some shape or form.

“The present proposals reflect the Conservative party’s pledge to ‘force equal pay audits on any company found to be discriminating on the basis of gender’, rather than the much more extensive approach preferred by the Liberal Democrats which would have required ‘fair pay audits’ for every company with over 100 employees.”

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